Google's Motorola deal could be boost in rivalry with Apple

With official OKs from the U.S. Department of Justice and the European Commission on Monday, Google moved closer to finalizing its deal to acquire Motorola Mobility.

With official OKs from the U.S. Department of Justice and the European Commission on Monday, Google moved closer to finalizing its deal to acquire Motorola Mobility.

That could be great news for Google, which is looking to stretch its interests into more hardware ventures, and bad news for competitors like Apple.

"This is a big deal for Google as it paves the way for them to compete better in the smartphone and living room space," said Patrick Moorhead, an analyst with Moor Insights and Strategy. "Apple should be the most concerned in that Google can finally take advantage of software and hardware integration. This removes one of the final barriers to greater success to Google solutions and could deliver a more elegant solution -- more like we see from Apple."

On Monday, both the DOJ and the European Commission approved Google's plan to purchase mobile-phone, set-top box and tablet maker Motorola Mobility for about $12.5 billion. However, this doesn't mean the acquisition is a done deal. The plan still needs to get approval from officials in China, Israel and Taiwan.

The DOJ and the European Commission were two major hurdles, though.

Scooping up Motorola will be a huge boon for Google, which continues to make inroads into the home entertainment market with its Google TV platform. Motorola, a world-renowned smartphone maker, also is a major player in the home set-top box sector.

If the acquisition goes through, it is also expected to give Google one of the smartphone industry's largest patent libraries. The company is hoping to use the thousands of Motorola patents as it defends itself against patent infringement lawsuits over the Android mobile operating system.

"The impact from this deal may be even larger than just smartphones over time," said Dan Olds, an analyst at Gabriel Consulting Group. "Not many have talked about Motorola's set-top cable box business and their relationships with cable TV providers. Those boxes could be the keys to the living room for Google.... It would be relatively easy for Google to build [a home entertainment] system and, with Motorola, they already have distribution in place."

Also on Monday, there were reports that Google had developed a prototype device designed to stream music over home Wi-Fi networks.

In documents filed with the Federal Communications Commission, Google said that it's in the process of testing the device.

With an online music store and a music storage service already in place and a streaming music device in development, Google seems to be going after a chunk of the music and entertainment industry that Apple has dominated with its iTunes store and its array of iPod devices.